There is a conviction within us. Strange? Even stranger than fiction; the conviction is uncommon. And strong!
We don’t really know where this is coming from. It’s odd all the same. Yet, we are convinced, we are going somewhere great. It is becoming clearer that we are getting nearer by the day.
We have two powerful tools at hand: Value Added Tax (VAT) and the stamp duty. They are the compasses we are using to navigate. And it’s handsomely paying off.
The rave of the moment is Governor Nyesom Wike. He holds sway in the oil-rich Rivers State. He is our navigator-in-chief. And he’s perfectly living up to his billing. There is no dull moment sailing with him.
He is raving and raging, all for a very good reason. He is the ultimate face of true fiscal federalism. He not only talks the talk, he walks the talk to the letters. He writes the script and acts the lines. So effectively too!
Following closely on his heels is Lagos State Governor, Babajide Sanwo-Olu. He trails Wike’s every step. He aims his gaze at him. He is not ready to lose focus on him.
Together they are making things happen. They are putting life into our polity. All these are being done with the speed of light. The reason we are convinced we’re going somewhere.
Justice Stephen Pam of the Federal High Court, Port Harcourt, set the ball rolling. That was on August 10, 2021. He turned the narrative upside down. He practically unsettled the polity, positively.
He acted decisively. His historical pronouncement: “States, and not the Federal Inland Revenue Service (FIRS), should be collecting VAT and Personal Income Tax (PIT).”
He did this at the prompting of Wike, who filed the suit. The governor feasted on the ruling with great relish. It was the impetus Wike needed. With that, he went to work immediately.
He roared to high heavens: “We in Rivers State are standing on the path of history as representatives of the state to have taken the bull by the horns to challenge the illegality of Federal Government through the FIRS.”
Wike is acting from the position of knowledge. He has the advantage of being a lawyer. Not only that, he understands the dirty politics of VAT. Its distribution is awkward and awful. He is very much aware of the intricacies and the underlying factors.
He turned all these to strengths. That is why he is waxing stronger in this noble fight. It is a lifetime struggle. Nobody nailed it better than Wike.
He is the enfant terrible thorn in their flesh. He takes the war to their enclave. He braves the odds. He does not care a hoot. Whether their stinking ox is gored or bruised.
In fact, things are falling into pleasant places for him. He is the flagship needed in these our trying times. This is how he damned it all: “You can’t destroy beer in your state in the name of sharia, yet share from VAT on beer from other states. It’s hypocrisy. Free money has promoted laziness. If you want to be a governor, grow your state’s economy.
“You can’t contribute humongous numbers during elections that can’t translate to tax earnings for your state. If they can vote they should be able to work and pay tax.”
Gbam! Need we say more?
Sanwo-Olu saw some reasonable sense in Wike’s outpouring. And he had no viable choice than to align. And trust us, we will ensure he does not regret it. Not now not even in future.
Posterity will credit this to him appropriately. He is learning the ropes fast. We’re impressed. He did not waste time in assenting to the Value Added Tax Bill to become law.
Commissioner for Information and Strategy, Gbenga Omotoso, attested: “The governor signed the bill for a law to impose and charge VAT on certain goods and services. By this act, the bill has now become a law.”
More states are trooping out. They are queuing behind Rivers and Lagos. They are proud to be counted at this critical period when it matters most.
The tussle appears fiercest elsewhere. All the 36 states have taken up arms against the Federal Government on stamp duties. They sued the central government “for allegedly refusing to remit funds generated from stamp duties into state governments’ accounts.”
And the amount involved is quite huge. They vehemently contended: “The power to collect stamp duties lies squarely with the states and not the Federal Government.”
So? They urged the court to order the Federal Government to “refund over N176 billion collected as stamp duties on individual persons’ transactions within their respective states.” The period under contention spanned from 2015 to 2020.
Federal Government is not giving up easily. It is extremely desperate. And it is irritatingly arrogant about it. Imagine! In the face of all these facts and actualities, government is toying with a ridiculous option.
Government is in serious despair and distress. It’s exploiting and exploring an escape route. It has on its drawing board a constitution amendment. Just to fulfil inordinate greed.
It wants to delete VAT and stamp duty from the Concurrent List and have them listed on the Exclusive. It will be strictly for the executive to manipulate at will.
But a lone voice is resonating in the wilderness. He is Senator Ike Ekweremadu, he cautioned: “It is untidy for the Presidency or its agency to come through the back door to seek legislative intervention in its favour on the same matter that is prejudice.”
Ekweremadu is an apt and appropriate authority. He is a reference point, a classical case study. His input is vital at this juncture. He did his doctoral thesis on fiscal federalism.
That is where he is coming from. His argument is almost faultless. He was Senate Deputy President for three consecutive terms. He chaired the Senate Committee on Constitution Review for some period of time. So, he got the practical experience. He argued:
“VAT is essentially a consumption tax. What states like Rivers and Lagos are saying in essence is that the Federal Government cannot continue to rob them of taxes paid on goods and services consumed in their states; some with environmental and social consequences that they have to deal with, only to withhold as well as transfer a large chunk of such revenues to other states.”
In sane climes, reason prevails, but not ours. VAT ought to be collected and used for the very communities that generate such. Very simple.
The exact opposite is the case with us. Those who detest beer consumption are the very ones reaping bountifully from its VAT. Here, we walk on our heads and use our legs to think.
Ekweremadu chipped in again: “The major takeaway from the VAT and stamp duty imbroglio is that our feeding bottle strand of federalism is no longer sustainable. We must diversify and expand our economy now.”
He rammed it in further: “There is no other way than to remake our federalism to enable states to harness and unleash their endowments and comparative advantages.”
His final words: “I commend Governors Wike and Sanwo-Olu as well as Rivers and Lagos Houses of Assembly for their courageous moves. It is by so doing that our Constitution or laws can be tested and our federalism strengthened.”
Now, remember Sanusi Lamido Sanusi, the deposed Emir of Kano? He mounted the throne after serving as governor, Central Bank of Nigeria (CBN). You can’t pretend to have forgotten him so soon.
Governor-colleagues opposing Wike and Sanwo-Olu made that monumental mistake. They ought not to have listened to Sanusi alone. They ought to have paid serious attention to his advise.
But they would do none of that. Now, the stark reality is frontally confronting them. They are losing sleep. They are having nightmares unabated.
This certainly is not the best of times for them. Just before he left the throne unceremoniously, Sanusi did warn. But they opted to ignore him:
“If the North does not change, the North will destroy itself. If we don’t listen, there would be a day when there would be a constitutional amendment that addresses these issues of quota system and Federal Character. The rest of the country cannot be investing, educating its children, producing graduates and then they watch us.
“They can’t get jobs because they come from the wrong state, when we have not invested in the future of our own children.”
The time is right here with us! It’s no other time than now. Sanusi is an oracle of no small means. His predictions are coming to pass so soon. The ugly realities are staring us in the face. We are extremely happy for it.
VAT and stamp duty are vigorously driving fiscal federalism. The ultimate destination is true physical federalism. We are getting there faster than expected.
This is the true restructuring; the best for that matter. This is what some queer but powerful elements hate to hear. But it is happening.
Nobody dares stop this movement. They have just one risky option: To jump out of the moving train. That’s their Waterloo. It’s a choice.